Technology

Is Apple facing extinction in the future?

I have been highly critical of Tim Cook as CEO of Apple to the point that I have frequently been accused of being anti-Apple.

But, listen, under Cook, Apple has lacked innovation. Under Jobs, Apple came out with the iPod, iTunes, MacBook Air, iPhone, iPad. Under Cook, it came out with the Apple Watch, which came after plenty of Android watches – so the only leap has been AirPods.

Lack of innovation is ultimately what kills companies, particularly technology ones.

However, in very recent years Apple has started listening to its users like never before – and it seems that is all Apple needs to do.

The recent iPhone SE hits all the right spots – great specs, no obvious flaws, an aggressive price. There’s a decent range of iPhones now, in the sizes customers want, and with key problems resolved – dual sim, back to a great camera, and a long battery life.

The MacBook Pro got a solid refresh, the 16″ Pro doesn’t have a butterfly keyboard, which I loved, but most didn’t, and it’s done the right thing by sticking with non-touchscreen.

The MacBook Air no longer has an embarrassingly pixelated screen, and, more recently, it too has shed its butterfly keyboard.

The iPad Pro’s OS upgrade in 2019 was what we wanted with – improved multi-tasking, a more integrated Pencil experience, an improved document management – nothing spectacular but just good touches.

And Apple is integrating its products better. You can now approve or authenticate with AppleWatch, use your iPad as a second screen for a MacBook, AirDrop allows you to move something to another device easily.

Cook had a terrible start. But he’s finally doing a lot of good things. Sure, he’s not innovating – he’s perfecting – but Apple users are loving it – and that’s enough.

Add to that its massive cash reserves of $90.3B, the 2nd highest in the S&P 500 after Alphabet’s $103.7B, Apple is absolutely definitely not facing extinction anytime soon.


The mindset of the mainstream tech press is pretty consistent.
Apple makes stuff. It competes with commodity manufacturers.
Prices inevitably tumble. Therefore Apple MUST FAIL.

And the tech press have been repeating this mantra for ever. Imagine I link to about 100 articles with the “Apple is Doomed” theme. I won’t because it is boring.

But for the first time, some of them have noticed that the exact opposite is happening – and they are still puzzled.

In the PC market, the Mac is slowly strengthening while other manufacturers are in decline. In terms of pure business terms, Apple makes more from the Mac than the top five largest OEMs combined.

This is because PC OEMs make around $15 per PC. And Apple might make 20X that. And with that reality, Apple can afford to be inventive, establish market trends.

In the smartphone space, something similar is occurring. With the exception of Samsung, all of the Android OEMs are loss-making businesses. And even Samsung is seeing a collapse in handset profits, leaving Apple with a profit share of about 80%.

And Apple continue to enter new markets with new devices. Leaving the rest of the industry red-faced and flummoxed.

The interesting part of this is why Apple continues to defy these laws of market dynamics. It’s not actually complicated or mysterious.

Apple is capable of selling differentiated valuable items. It uses both hardware and software to add value and then sells into a market that is happy to pay for the added value. This creates profit.

Its competitors only assemble parts, and have outsourced their software to third parties. (Microsoft or Google) By doing so they lose control over their own products, and lose any ability to add value. So they compete on price. And you get perfect race-to-the-bottom conditions.

Apple won’t face extinction until it forgets how to add value. Or if it complacently ignores its customers’ needs.

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